A U.S. company's foreign subsidiary had these amounts in local currency units (LCU) in 20X2: Cost of goods sold Beginning inventory Ending inventory LCU 1,000,000 O $1,237,700 O $1,100,000 O $1,250,000 O$1,083,200 LCU 80,000 LCU 110,000 The average exchange rate during 20X2 was $1.10=LCU 1. The beginning inventory was acquired when the exchange rate was $1.00-LCU 1. Ending inventory was acquired when the exchange rate was $1.18-LCU 1. The exchange rate at December 31, 20X2, was $1.25=LCU 1. Assuming that the foreign country is highly inflationary, at what amount should the foreign subsidiary's cost of goods sold be reflected in the U.S. dollar income statement? 3

A U.S. company's foreign subsidiary had these amounts in local currency units (LCU) in 20X2: Cost of goods sold Beginning inventory Ending inventory LCU 1,000,000 O $1,237,700 O $1,100,000 O $1,250,000 O$1,083,200 LCU 80,000 LCU 110,000 The average exchange rate during 20X2 was $1.10=LCU 1. The beginning inventory was acquired when the exchange rate was $1.00-LCU 1. Ending inventory was acquired when the exchange rate was $1.18-LCU 1. The exchange rate at December 31, 20X2, was $1.25=LCU 1. Assuming that the foreign country is highly inflationary, at what amount should the foreign subsidiary's cost of goods sold be reflected in the U.S. dollar income statement? 3

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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